Hessel Corporation has two operating departments (Domestic and Global) and three service departments: Human Resources (HR), Legal, and Testing. In the most recent period, the following costs and service department usage ratios were recorded: Supplying Department Human Resources Legal Testing Direct cost From: Human Resources Legal Testing Total Human Resources 0 10% 10% Costs $ 264,500 Allocated to: Domestic $ Legal 이 $ 15% 0 0 $ 190,000 Required: Allocate the service department costs to the two operating departments using the reciprocal method. Note: Do not round intermediate calculations. Global Using Department Testing 0 10% 0 0 $ 90,000 Domestic 50% 60% 45% $ 541,000 Global 25% 30% 45% $ 490,000
Hessel Corporation has two operating departments (Domestic and Global) and three service departments: Human Resources (HR), Legal, and Testing. In the most recent period, the following costs and service department usage ratios were recorded: Supplying Department Human Resources Legal Testing Direct cost From: Human Resources Legal Testing Total Human Resources 0 10% 10% Costs $ 264,500 Allocated to: Domestic $ Legal 이 $ 15% 0 0 $ 190,000 Required: Allocate the service department costs to the two operating departments using the reciprocal method. Note: Do not round intermediate calculations. Global Using Department Testing 0 10% 0 0 $ 90,000 Domestic 50% 60% 45% $ 541,000 Global 25% 30% 45% $ 490,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Hessel Corporation has two operating departments (Domestic and Global) and three service departments: Human Resources (HR),
Legal, and Testing. In the most recent period, the following costs and service department usage ratios were recorded:
Supplying Department
Human Resources
Legal
Testing
Direct cost
From:
Human Resources
Legal
Testing
Total
Human Resources
Costs
10%
10%
$ 264,500
$
Allocated to:
Domestic
Legal
0 $
15%
0
0
$ 190,000
Required:
Allocate the service department costs to the two operating departments using the reciprocal method.
Note: Do not round intermediate calculations.
Global
Using Department
Testing
0
10%
0
0
$ 90,000
Domestic
50%
60%
45%
$ 541,000
Global
25%
30%
45%
$ 490,000
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